Bulls Run Scared

Every week, the American Association of Individual Investors (AAII) measures investor sentiment. And the latest bullish sentiment reading ranks as nothing short of jaw dropping.

It plummeted 45%, from 35.5 to 19.3. That’s the largest weekly drop in over a decade, folks.

What gives? I mean, stocks just hit another record high, and suddenly investors don’t feel bullish at all?

So much for embracing the notion that the trend is our friend.

Here’s what you need to know… I’ve said it before, and I’m sure I’ll say it again – when virtually no one is optimistic about the stock market, that’s all the more reason we should be bullish. Just take a look at the data and tell me you disagree…

As you can see, when the AAII bullish sentiment reading drops below 25% during the current bull market, stocks (almost) always rally over the next three and six months.

Machine-learning algorithms are cleverly downloading faces from social media pages like Facebook… and then uploading those faces to unsavory videos. This is the latest example of technology moving faster than our moral ability to use it.

One mystery trader just rolled over a massive volatility bet that could pay out $260 million if he’s right again. Can you blame him? He’s got seven-plus years of the bull trend on his side. Well, none of that means squat if you’re Goldman Sachs.